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Jilted generation stays with parents

MARK COLVIN: It's one of the biggest social changes for decades - young people who can't afford to move out, many of whom can't get a decent job, and forced to go on relying on their parents for years.

A few years ago, people were talking about empty nest syndrome, as middle-age parents were left in big houses they'd bought to house themselves and their children.

But now those houses are filling up again.

It's nothing like as big a problem in Australia as it is in Britain and Continental Europe, where massive youth unemployment has left Generation Y almost stranded.

Shiv Malik and Ed Howker are well-known UK journalists from The Guardian and Spectator respectively, and the co-authors of Jilted Generation: How Britain Has Bankrupted Its Youth.

I saw them on Sunday night at the Festival of Dangerous Ideas in Sydney and asked them to come on to PM and discuss their findings.

They argue that the fundamental needs of young people are being ignored, especially when it comes to jobs, housing, and how to fund their long-term health and pensions.

I started by asking Shiv Malik if it was different for 25-year-olds today compared to back in the 70s or 80s.

SHIV MALIK: Yes absolutely. I mean you can look at the trends and even in Australia the Bureau of Statistics found fairly recently that in fact the trend for young adults living at home with their parents is higher than it's ever been since the 1970s, which is probably when the stats go back that far.

So it is, it's about 23 per cent now of young adults who are living with their parents here.

MARK COLVIN: How much of that in both our countries, Australia and the UK, is because of the soaring price of property?

SHIV MALIK: It is obviously interlinked to housing and possibly a lack of building housing. Certainly in Britain we haven't been building enough and in urban areas, where more people are moving for jobs, where there are jobs and usually they're growing areas, we have seem to have worldwide sort of constrained how much housing we're going to build.

MARK COLVIN: How much is also about the fact that I got my education largely for free, I'm a boomer, and now in your country, for instance, I think people are paying £9,000 a year?

ED HOWKER: Huge amount.

MARK COLVIN: They have to borrow at the age of what 21, 22?

ED HOWKER: Yeah, well so what we're really looking at here is a confluence of different factors.

High house prices are certainly one of those and it's not just that we haven't been building enough house prices, it's also that a lot of people have decided, older people have decided that they haven't actually got the revenue they expected to get from their pensions and so have started investing in buy-to-let speculation and that's certainly going on in Australia right, where huge numbers of people are buying up houses to let out, and turning a generation who can afford not to live with their parents into a kind of renter-class really who have no chance of being able to buy somewhere but who are forced to pay this kind of tariff to the older generation which is peculiar. So that's one.

Two, that wouldn't matter so much if wages were high for young people actually but they're very low too and it's increasingly difficult to get stable work with prospects and a decent wage that will allow you to pay your rent and also have enough discretionary spending.

But education is the kind of, is the final factor, because increasingly as education costs are being privatised and dramatically increased and that the state no longer assumes the liability for funding higher education, people are left with heavy debts to pay.

MARK COLVIN: In Australia the price of property was very low in the 60s and 70s and right into the early 80s because the country was protectionist, the dollar hadn't been floated, it was a very closed economy and then the dollar was floated, the Hawke/Keating government opened the whole place up and property prices skyrocketed.

To reverse the trend are we going to have to go back to a more regulated, a more isolationist economy or is there another way to do it?

SHIV MALIK: Well there is another way to do it but to speak about that first point in a sense, that's also been another worldwide trend where capital controls have been totally relaxed.

So in Britain, for example, with the Olympic Games, you know we build all of these flats for the athletes to come to, it's in a prime location in East London, and what did we do? Well, we sold off all of those flats to the Qataris and so now Qatar owns all of these, you know, these properties right in this sort of wonderful area of London where all these young people want to live.

ED HOWKER: They're rental properties too right?

SHIV MALIK: Right and they'll become rental properties and that rental will go back to the Qataris.

MARK COLVIN: And very expensive ones.

ED HOWKER: Of course all rental properties are expensive.

MARK COLVIN: Out of the reach of young people?

ED HOWKER: Of course.

SHIV MALIK: Yeah and so, I mean it's absolutely crazy. You know, the British government basically puts up the investment, we as a community sort of you know allow this to happen and then someone else from far away gets to profit quite considerably from this.

It doesn't make any sense.

There's another way. Australia, for example, is a huge country. Why are you rationing you land out? Why aren't you building more homes? I mean, in Britain you can see perhaps we get a little bit more worried about our space there but actually even in Britain we have plenty of green space, we have plenty of space, full stop, to build on.

But there seems to be this other thing going on, which is that as the median age grows, so in Australia actually your median age is quite low, it's 35, it will go up to about 41 over the next 50 years, so demographically you're a very young country compared to Britain where the median age is about 45.

But where these houses are, often you find older people saying well we don't want any development here, so we'll give our kids a deposit to go buy a house but we don't want any houses built next to us.

MARK COLVIN: To be fair there's also a really strong environmental argument.

SHIV MALIK: There is.

MARK COLVIN: We have huge constraints here on water, for example. And also we have big cities which are already in many ways environmentally disastrous because you're forced to use cars and travel long distances.

I mean surely…

SHIV MALIK: So then one other solution is to say OK look, so old people live in houses that are slightly now too big, if you want, because their children have left, so they've got these spare rooms and then you say, well OK look, do you want to get taxed for this or why don't we force you out into smaller houses?

And of course old people say well no, that's absolutely outrageous and rightly so, this is my home. So what do you want to do about it really? That's the question, you know, because you can't have it always and we can't be worried about everything and yet do nothing for young adults.

MARK COLVIN: The Guardian's Shiv Malik and The Spectator's Ed Howker. And you can hear the full version of that longer and very vigorous interview on this week's edition of Friday Late.